South Carolina Plays Catch Up

Prices have sagged in South Carolina for several years, making markets like Myrtle Beach and Charleston popular sites for dozens of best bargain lists. The latest quarterly report from the government’s FHFA House Price Index (HPI) reports the Charleston market led the nation in price increases during the first quarter.

As measured with purchase-only indexes for the 100 most populated metropolitan areas in the U.S., first quarter prices in the Charleston-North Charleston, SC Metropolitan Statistical Area (MSA) increased by 10.7 percent. Prices were weakest in the New Orleans-Metairie, LA MSA, where they fell 2.6 percent. Positive appreciation was recorded in 71 of the 100 MSAs.

Nationally the index that U.S. house prices rose 1.3 percent in the first quarter of 2014, the eleventh consecutive quarterly price increase in the purchase-only, seasonally adjusted index.

“Although the first quarter saw relatively weak real estate transaction activity—in part due to seasonal factors—home prices continued to push higher in the first quarter,” said FHFA Principal Economist Andrew Leventis. “Modest inventories of homes available for sale likely played a significant role in driving the price increase, which was similar to appreciation in the preceding quarter.”

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. Compared with last year, house prices rose 6.6 percent from the first quarter of 2013 to the first quarter of 2014. FHFA’s seasonally adjusted monthly index for March was up 0.7 percent from February.

FHFA’s expanded-data house price index, a metric that adds transaction information from county recorder offices and the Federal Housing Administration to the HPI data sample, rose 1.4 percent over the prior quarter. Over the last year, that index is up 7.0 percent. For individual states, price changes reflected in the expanded-data measure and the traditional purchase-only HPI are compared on pages 17-19 of this report.

The seasonally adjusted, purchase-only HPI rose 6.6 percent from the first quarter of 2013 to the first quarter of 2014 while prices of other goods and services rose only 0.8 percent. The inflation-adjusted price of homes rose approximately 5.7 percent over the latest year.

Significant Findings:

The seasonally adjusted, purchase-only HPI rose in 42 states and the District of Columbia during the first quarter of 2014 (up from 38 states during the fourth quarter of 2013). The top annual appreciation was in: 1) Nevada, 2) District of Columbia, 3) California, 4) Arizona, and 5) Florida.

Of the nine census divisions, the Pacific division experienced the strongest increase in the first quarter, posting a 2.1 percent increase and a 13.2 percent increase since last year. House prices were weakest in the Middle Atlantic division, where prices increased 0.1 percent from the prior quarter.

As measured with purchase-only indexes for the 100 most populated metropolitan areas in the U.S., first quarter price increases were greatest in the Charleston-North Charleston, SC Metropolitan Statistical Area (MSA) where prices increased by 10.7 percent. Prices were weakest in the New Orleans-Metairie, LA MSA, where they fell 2.6 percent. Positive appreciation was recorded in 71 of the 100 MSAs.

The monthly seasonally adjusted purchase-only index for the U.S. has increased for 23 of the last 24 months (November 2013 showed a decrease).

The Pacific and Mountain census divisions—the two divisions that saw the greatest price increases between March 2012 and March 2013—saw substantive decelerations over the latest 12 months. Price appreciation was 12.4 percent between March 2013 and March 2014 in the Pacific Division, more than three percentage points below the rate for the preceding 12 months. At 9.8 percent, the last 12-month appreciation in the Mountain division was more than four percentage points below the rate in the preceding 12 months.

The Ultimate Guide to Fighting Low Appraisals

Nearly half the home buyers in America experience something like this:
You’ve saved for a down payment and worked hard to get approved for a mortgage. After months of looking, you found a great house that meets your needs and fits your budget. Your offer has been accepted. You spent money on inspections, a title search, a survey and other closing costs. As the closing date nears, you gave notice where you live and put down a deposit on a moving company.

Then you receive a letter from your lender. Your dream home has appraised five percent lower than you anticipated based upon the price you had agreed upon with the seller. The lender is unwilling to increase the amount of your loan.

The clock is ticking toward closing. If you don’t come up the difference in time, the house is gone. You’re out of pocket for your costs to date and you have to start your search over. It may take months or longer to find a deal

Sound familiar?
Whether you’re a buyer or seller, now you can fight back when a low appraisal threatens to cost you serious money, or to lose the house of your dreams.